How to get a home-builder rebate

Plus, does an heir have to accept an underwater property?

LewSichelman

Realty Q&A is a weekly column in which Lew Sichelman, a nationally syndicated columnist who has been covering the housing market for more than 40 years, responds to readers’ questions on real estate.

WASHINGTON (MarketWatch) — Question: I read your recent column in a newspaper about private initiatives designed to get home sales moving again and I have a couple of questions about the program that involves a partial refund of the sales commission. What exactly is the name of this refund program/company licensed in Florida that offers new home buyers a refund for buying a new home from a builder? My wife and I will be doing so in May/June 2012 and would like more information and details regarding the builders who participate as well as this program itself. —J.K.

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Answer: The company that is offering the 80% refund of its sales commission is called NewHomeRefunds.com. It’s operated by a long-time real-estate executive who has worked for large public home builders such as Del Webb, WCI Communities and Avatar Holdings. The company has a very thorough question-and-answer section on its website which should provide most, if not all, the information you are looking for.

The site also provides a partial list of builders signed up to participate. But if you don’t find the name of your builder, there is a registration form on the site that you can print out and take to the builder of your choice. If the builder doesn’t want to sign the form, contact the folks at NewHomeRefunds.com. They will call your builder directly to explain the program.

For readers who did not have the good fortune of reading the original article, here’s a synopsis: New home buyers who register with the company and purchase a house from a participating builder will receive a refund equal to 80% of the company’s 3% broker commission. Thus, if you buy a brand new $300,000 home, you’d receive a rebate of $7,200 — about two weeks after closing, the company says.

The benefit to buyers is obvious, especially since buying a new home is a lot cleaner than buying an existing property, particularly if it is a short sale or foreclosure. Not only does it put cash back into their pockets, but buyers also don’t have to repaint or remove worn out appliances. And the home is covered by a warranty.

For builders, it’s another way to compete. After all, they can lower their prices only so much and throw in only so many options and upgrades. Getting some money back is just one more reason for people to choose a new home.

Question: Please complete your answer to the recently asked question (Realty Q&A, Jan. 6, 2012) about a grandfather who guarantees or co-signs his granddaughter’s new home loan. Does his obligation pass to his estate upon his death? —W.R.M., McLean, Va.

Answer: I am but a humble typist, not an attorney. However, I believe that if a co-borrower who has no ownership interest in the home were to die, the mortgage obligation would remain with the estate until it is settled.

As long as the granddaughter continues to make her regular house payments while Gramp’s estate is “open,” the mortgage obligation is merely a contingent one. However, if the granddaughter missed one or more payments while the estate is still open, the estate would have a joint and several liability which might complicate the transfer of assets. Once the estate is settled, though, I don’t think Gramp’s heirs would have anything to worry about.

Again, though, I am not an attorney, and this should not be taken as legal advice. For better information on these sorts of things, it is always best to consult a lawyer who specializes in trusts and estates.

Question: My elderly sister is underwater in her mortgage. Should she die, I would be in line to inherit her house. She has some money in an IRA, but not enough to pay off the loan. She also owns another property that is free and clear. As executor of her estate, would I be required to pay off the loan by selling the other property, or could I refuse to accept the underwater house, but keep the one she owns outright? —S.S., Poway, Calif.

Answer: Again, speaking as a neophyte when it comes to strictly legal matters, I don’t believe an heir can be forced to accept a property she does not want. Nor can she be forced to assume a related indebtedness she does not want. For anything more than that, consult appropriate legal counsel.

Nationally syndicated columnist Lew Sichelman has been covering the housing market for more than 40 years. MarketWatch readers are encouraged to send their real estate questions to him at lsichelman@aol.com . Answers will be presented in this column every Friday. However, because of the volume of e-mail he receives, he cannot answer every reader’s query.

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